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Private Equity Week Wire for Tuesday 6/26

CHARLOTTE, NC — Carolina BroadBand Inc. today
announced that an inability to raise the needed $400 million worth of debt financing has forced it to both push back the construction of its fiber optic
telecom networks and reduce its workforce. The news comes just one year after the company raised $402 million from a consortium of 13
investors including M/C Venture Partners, JP Morgan, Morgan Stanley Dean
Witter, Bank of America, Carousel Capital, First Union and Wachovia Bank.
“We strongly believe in the management team assembled to operate Carolina
BroadBand,” said Watts Hamrick, First Union Capital Partners. “These are
seasoned and talented professionals with track records of success in the
telecommunications and broadband industry. It’s a sound business plan and
we’re confident of securing the necessary debt capital to proceed.”
The decision to push back will result in the layoff of 88 of
110 employees, primarily focused on network construction, over the next
90 days.
All affected personnel will receive a severance package. In face-to-face
meetings, Schuler told his employees that they will be given priority status
when the company begins rehiring staff.
Carolina BroadBand has conducted several engineering, pre-construction and
construction activities to-date. The company has completed measured walk-outs
of Charlotte and Raleigh, digitized several thousand miles of strand mapping;
and profiled, measured and applied for access on thousands of poles. The
company has also implemented a joint-trenching strategy with utilities to
install conduit and limit underground construction.

NEW YORK — Reinforcing its position as a premier provider
of interactive media technology, Interactive Video Technologies (IVT) today
announced the closing of its third round of financing. Led by Tudor
Ventures, this $10 million round is a critical step towards the expected
launch of IVT’s newest rich media solution this Fall — a Web-based platform
for creating, deploying and managing interactive rich media Web pages.

In addition to investments from both Sun Microsystems and Tudor Ventures –
an early investor in IVT – other participants included the University of
North Carolina Endowment Fund and several other earlier round investors.

SEATTLE — Voyager Capital today announced it has hired Elizabeth Morgan
as a senior analyst responsible for sourcing and evaluating new investment
opportunities and assisting portfolio companies. Morgan is currently a board
observer for Captura Software. She brings to Voyager Capital 15 years of
experience in product strategy, marketing, business development, and sales of
enterprise software, most recently as a Product Strategy Manager at PeopleSoft
Inc., a world leader in providing eBusiness applications that enable
customers, suppliers, and employees to power the Internet, and Wonderware
(formerly Marcam Corp.), a global leader in the Industrial Automation

Prior to joining Voyager, Morgan interned with Lehman Brothers in the
Capital Markets group.

ROCHELLE PARK, NJ — Congruency Inc., a leading provider of award-winning and carrier class VoIP telecommunications infrastructure
software and products, today announced the receipt of $10.65 million of new financing.
To date, congruency has raised over $24 million.
New investors in this financing include London-based Elwin Capital Partners and the Challenge Fund. This newly formed relationship with Elwin is expected to accelerate the
company’s sales, marketing and distribution initiatives to European PTTs and other global communication providers.

SANTA CLARA, CA — Canesta Inc., a developer of
patent-pending interface technology for mobile and wireless devices, today
announced that it has received $17 million in a second round of financing led
by Carlyle Venture Partners. Also joining in the round is Patricof & Co.
Ventures and previous investors JP Morgan Partners and Thales, Inc.
The funding will be used to expand Canesta’s management team and
accelerate development of its interface technology. With the completion of
this round, Canesta has raised more than $20 million.

FREMONT, CA — Actelis Networks, the first company to boost copper performance to fiber-quality speed and reliability, announced funding
from Anschutz Investment Company, the founder and a major shareholder of Qwest Communications, Innovacom (France Telecom venture capital subsidiary), Salomon Smith Barney,
Draper Fisher Jurvetson MeVC, and Vertex US. Earlier Actelis announced a $26 million first closing of series C led by Carlyle Venture Partners with backing from all existing investors,
which include New Enterprise Associates, U.S. Venture Partners, Walden, Global Catalyst Partners, and Vertex Management. Actelis noted that three out of the existing investors
increased their investment beyond their pro rata share.

SACRAMENTO, CA — Onvoi Business Solutions, a leading human resource business process outsourcing company, today announced that it
has secured $3.5 million in funding from Hales & Company’s private equity arm, Distribution Partners Investment Capital, L.P.

NEW YORK — Prospect Street Ventures today announced that Joseph G. Sponholz has joined the firm as a General Partner
after a distinguished career at Chase Manhattan Bank and its predecessor companies. Sponholz will direct Prospect Street’s financial technologies investment initiatives, stepping up Prospect Street’s increasing focus on high growth companies and technologies
serving the financial services sector.
Prospect Street also announced that Sponholz will join the Board of Directors of two Prospect Street portfolio companies, ServiceEngine and ClosingGuard. Sponholz, a former Vice Chairman of Chase Manhattan Bank, has earned industry-wide recognition for technology management, for managing the merger office for two of the
most successful financial mergers (Chemical/Manufacturers Hanover and Chemical/Chase), and for his leadership in key financial and business strategy issues. At Chase, Mr. Sponholz
was the Corporations’ most senior IT executive, overseeing $3 Billion of annual IT spend. In e-commerce, he launched and oversaw investments in several financial
technology companies, including the Small Value Payments Company (as Chairman), Spectrum, a bill presentment and payment joint venture with Wells Fargo and First Union and
Identrus an industry security consortium. He also served on the Board of BITS (Banking Industry Technology Secretariat), and chaired its meta-architecture project. Previously, he was
the member of the Executive Committee with responsibility for Chase Technology Solutions, a business with more than $600 million in annual profits and $3 billion in annual revenue.
Immediately prior to Chase, Mr. Sponholz held key positions with Chemical Bank as head of strategic planning, the bank’s first Chief Technology Officer, and later as Chief Financial
Officer. Prior to joining Chemical Bank, Mr. Sponholz was a Partner at Booz Allen and Hamilton.

FORT COLLINS, CO — Sixth Dimension, Inc., the leading provider of network communications and control technology for the power
industry, has closed the initial tranche of its third round of investment funding.
According to CFO Lauren Arnold, $5.5 million in new capital has been raised in the first tranche of this round. The company has agreed to accept additional funds over the next 60
days as several strategic investors have indicated a strong interest in investing. The additional funding will enable Sixth Dimension to accelerate sales and deployment of its highly
scalable, intelligent network for the power industry. The company also plans to continue expanding its suite of service packages for remote monitoring and control of distributed assets
such as standby generators, meters and load centers by working with leading software providers in the energy information systems arena.

Systems Inc., the end-to-end bioinformatics solutions provider to
the biopharmaceutical industry, today announced that it has secured second
round equity funding totaling $13 million. The financing comes from lead
investor Sterling Venture Partners, and new participating investors MacAndrews
& Forbes, Allianz, Schoffstall Ventures, and e-media. Repeat investors
include, Core Capital Partners and Mid-Atlantic Venture Funds.

For yesterday